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Xiaomi Takes Over Apple’s Position as Third Largest Manufacturer in China

May 10, 2014 - Written By Joshua Koh

Xiaomi has recently overtaken Apple in China’s smartphone market for the first quarter of 2014. This comes as China replaces America as the world’s largest smartphone market and speaks volumes about Xiaomi’s ability to beat Apple at its own game.

Figures from Counterpoint Technology Market Research firm, shows that Samsung holds top spot at 18%, Lenovo with 12% in second place, third place goes to Xiaomi at 11% and Apple holding the fourth spot at 10%. The 1 percent gain over Apple might not seem much, but taken into consideration that companies such as Apple and Samsung has far deeper pockets to market and advertise their devices and possess greater brand recognition, this is remarkable for a relatively new company. It certainly seems that the combination of MIUI’s features and themes, low price point coupled with excellent specs have hit the sweet spot with the Chinese consumers. An example of such a device is the Xiaomi Redmi Note which retails at $130 for specs such as 1.4GHz Octa-Core processor, 5.5 inch 720p display.

Some factors which could have attributed to this success, would be its ‘limited edition‘ strategy in which demand is driven up by the small supply of Xiaomi devices. This helps to drive up sales by creating the impression that the devices are so popular that there is inadequate supply. Another possible factor could be the use of guerrilla marketing tactics to raise awareness and promote the Xiaomi devices. For those who are unaware, guerrilla marketing works by utilizing unconventional marketing tactics such as ambushes to surprise customers. This creates a more positive or lasting impression on consumers as these experiences are more memorable due to how unique they are. The third factor could very well be Xiaomi’s expansion into the Southeast Asian markets such as Hong Kong, Taiwan and Singapore. This raises awareness in China itself over Xiaomi’s transition into a global brand.

Moving forward, the question here is whether Xiaomi will be able to sustain its growth in the second quarter at home, as it focuses internationally. As the Chinese market itself has rather stiff competition, it remains to be seen as to how Xiaomi manages customer’s expectation and continue to promote its products with the limited resources it has. The low-cost of production within China would also play a part as other Chinese brands such as Oppo are equally capable in producing devices which are cheap and have excellent specs.